Fertilizer and oil stocks are in the spotlight as the markets start to price in supply constraints and the impact of the Russia-Ukraine war. Fertilizers are essential components in the agricultural industry and have a bearing on human and animal food chains. Without fertilizers, the world's food supply would diminish. To further add to the sector's challenges, Russia is one of the top fertilizer producers globally. Still, it cannot sell its products because of the myriad sanctions upon it. Therefore, there has been a drop in fertilizer supply, which has made the price of fertilizers jump.
Nutrien (NYSE: NTR), a Canadian company, foresees the Russia-Ukraine war as ongoing and plans for further disruptions to its supply chain. Ken Seitz, the CEO of Nutrien, says that global potash and nitrogen crop nutrients will be affected by the ongoing war. Therefore, the company is poised to increase potash production.
Apart from Nutrien, which will benefit significantly from the current supply constraints due to the war, this article will highlight three stocks that have already seen increases. They are Intrepid Potash Inc (NYSE: IPI), CF Industries Holdings Inc (NYSE: CF), and The Mosaic Company (NYSE: MOS).
1- Intrepid Potash Inc
Inrepid Potash Inc (NYSE: IPI) is a global fertilizer manufacturing industry leader. It is based in the U.S and is the largest producer of muriate of potash. Muriate is essential for crop growth and is used as an animal feed. Also, IPI mines magnesium and sulfur. Therefore, it has clients in the oil and gas industry.
IPI revenue will increase this year as global potash reserves dwindle. As a result, this makes IPI a lucrative stock for investors that wish to make money from the fertilizer industry. The fourth quarter and full-year report for 2021 showed earnings of $223.9 million and $249.8 million, respectively. There was increased cash flow from operations just close to the beginning of this year, and we see that trend continuing due to the recent Russia-Ukraine war. Total revenue jumped 75% year-over-year with a 137% increase in earnings per share.
IPI is a company that should be in your portfolio.
2- The Mosaic Company
The Mosaic Company (NYSE: MOS) is a leader in manufacturing integrated potash and phosphate. Its employees span six countries and are about 13,000 people, with its customers spread over 40 countries. MOS stock has risen more than 60% over the last six months.
The fourth quarter and full-year revenue recently reported by the company showed encouraging results. Full-year revenue stood at $12.4 billion, representing a 42% rise year over year. Stronger pricing offsetting lower volume was the cause of this revenue increase. MOS had a net income of $1.63 billion. Earnings per share saw a significant improvement as it was $4.27 and far above the $1.75 paid last year. MOS expects to complete a new potash mine later this year.
MOS has a strong earnings record and is a stock we recommend.
3- CF Industries Holdings Inc
CF Industries (NYSE: CF), or CF for short, is a leader in producing hydrogen and nitrogen products used for industrial applications. Some of these products are used for clean energy, fertilizers, and emission reduction. CF's core business, though, is the sales of ammonia and is a leader in ammonia production in the U.S.
CF reported its fourth-quarter and full-year earnings in February. Sales for the year were worth $6.54 billion, which is a 37% increase in revenue year over year. Sales were stimulated by strong global demand. As a result, earnings per share were $4.24, a significant improvement over the $1.47 per share last year. CF (NYSE: CF) is a leader in the clean fuel economy, which stands as one of its competitive advantages. As a result, this stock is profitable for both the short and long term.
If you're not looking at the fertilizer sector at this moment, then the market is leaving you behind. I mentioned Nutrien Ltd (NYSE: NTR) as our fertilizer stock of choice in March when it was below $98. Now, this stock is trading at $112. There's still room for growth, especially with the ongoing crises in Ukraine.